Day trading in Cryptocurrencies: Is it Really Worthwhile?

Trading used to be restricted to those employed by brokerage firms, trading houses, or large financial organizations, but with the introduction of the internet and online trading platforms, nearly anybody may participate.

Cryptocurrency day trading may be a rewarding endeavor if done correctly, but it can be difficult for rookie traders, particularly those unprepared and lack a well-thought-out strategy. Even the most experienced traders experience losses and hard patches, so is day-trading worth it?

Advantages of Day-Trading

  1. Volatility is the norm

When it comes to cryptocurrency, it’s essential to keep in mind that the market is extremely volatile. Bitcoin can start the day at $12,000 and then plummet to $10,000 in less than two hours, and expert traders will not even blink. However, if you wish to start day trading, this volatility can be a very profitable instrument because the profit opportunities are many.

2. 24/7 market

One of the most distinctive features of cryptocurrency trading is that it is available 24/7. As a result, it is so fortunate to have access to all of the benefits that come with a market that never closes.

3. Immature market

The cryptocurrency market is so simple to understand that it attracts a large number of newcomers and inexperienced traders. Because there are so many beginner traders, those with a little more understanding naturally have an advantage and can move in and out of positions or respond to situations faster, avoiding loss.

4. Unregulated

The stock market is extensively regulated, particularly in the United States, and those restrictions come with a vast number of limitations, including, but not limited to, how frequently one can trade. However, for the most part, cryptocurrency trading is unregulated and does not follow the same set of laws as the stock market.

In many cases, you can start trading regardless of your experience, account size, or even age! That indicates that the entry barrier to day trading is substantially lower than the entry barrier to day trading other asset classes.

Disadvantages of Day-Trading

There are pros and cons to day trading cryptocurrencies, just as there are to most things in life, so read the entire article before rushing out to get wealthy.

  1. Liquidity.

The bitcoin market is small in comparison. It can be difficult to exit a position at the price you want when you want it, which is not ideal for a day trader. Slippage is a more significant issue in financial markets than it is in other asset types.

2. News cycle

This works hand in hand with the notion of volatility. In other asset classes, corporate earnings and government data are provided regularly, allowing you to estimate where the trend is headed to some extent. In Bitcoin, though, it’s a free for all, and even the tiniest piece of news from a random site can send the price flying or crashing in the time it takes to read this line.

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